January 10, 2016

Another Year

A bit less than one year ago Borderlands was getting ready to close.  San Francisco voters had passed an increase in the minimum wage that was going to end the financial viability of the store, probably by the middle of July last year.  If not July of last year, then the second increase scheduled for July of 2016 was certainly going to do the job.

Though I and the rest of the staff strongly support minimum wage laws in general and we suspected that San Francisco's local increase would be generally positive for the city as a whole, we were trapped by the idiosyncrasy of the book business.  Unlike most products, books have a price printed on them.  That makes the usual business solution of increasing prices to cover higher expenses impossible for us.

Rather than ride the business down into the grave, I and the rest of the staff decided it was better to close quickly, at the time of our choosing and at the top of our game.

Our customers were very much opposed to this and, out of their comments & suggestions and in consultation with the staff, we decided to try an experiment.  We would ask that a minimum of 300 people sponsor the store for $100 each.  If that many people were willing, it would offset the added expense of the wage increases that were scheduled to raise the wage to $15 per hour by the middle of 2017.  Since that increased expense would be on-going, a basic assumption was that the sponsorship would need to recur each year.

We outlined a few benefits that we could offer sponsors at little or no cost to the business, and then announced the program.

The phones rang off the hook, the checks came flooding in, and people arrived at the shop in droves.  We had our initial 300 sponsors in 42 hours.  And the sponsorships kept coming.  By the end of 2015, there were over 800 sponsors of Borderlands.

Since then, the sponsorship program has transformed Borderlands in some fundamental ways. Among other things, we now know who we are running the business for and just how much the shop means to people.

Another thing that changed was how I looked at what we are doing.  Prior to last year, I viewed Borderlands as my business and as a piece of property that was mine alone.  I had always planned to run it until I was unable or unwilling to do so.  At that time, I would close.  I never, ever considered that Borderlands would (or even could) be something that outlived me or my ability to run it.

Last year changed that assumption.  And this year has only firmed my resolve to do everything I can to make sure that Borderlands outlasts me.

As planned, on January 1st we let all the sponsors from 2015 know that it was time to step up once again.  And they did.  The deadline to reach 300 sponsors was March 31st.  But, within one week we had the sponsors that we needed to remain open throughout 2016.  And the sponsorship are continuing to come in.

So, by one way of looking at it, we're set.  Based on the response this year, I feel pretty confident that we can continue to get the support we need to keep going, not just for this year, but for the years to come.

On the other hand, we need more sponsors -- lots of them.

Our current lease will expire in a bit over 5 years.  In all likelihood, our rent will skyrocket to a level that we cannot possibly cover.

Over the past few years, as I've watched the character of San Francisco change and the cost of rent go steadily upwards, my assumption was that we would be unable to find another location that we could afford when 2021 rolled around.  My plan was to scale down our operations in the cafe next door and co-locate the bookstore with the cafe.  It would cost us a lot of space for books, but I figured we could shoe-horn the two businesses into the same space.  Until the lease for the cafe ran out in 2025.  But by then I figured that I'd be ready to do something a bit less demanding than running two businesses and I would close the shop.

Then the minimum wage ordinance came up in early 2014, and made me pretty sure that the timeline for closing had just moved up.  But then we tried sponsorships and the idea was more successful than I had ever dreamed.  I started to feel that I had an obligation to all the people who had supported us, an obligation to try to find a way past 2021 and 2025 and even past my eventual incapacitation or death.

So now I'm working on how to build a bookstore that will last for the next 50 years or more.

I'm lucky that, in my personal life, I have already provided for all the people that I need to consider.  So, I already can plan on passing Borderlands on to a non-profit foundation.  But that's a question for (I hope) the more distant future.

The immediate and looming problem is where Borderlands will be physically located in 5 or 10 years.  The solution that I've decided on is to buy a building to house it, in perpetuity.  On first look, that seems like an impossible idea.  But . . . last year I was able to put aside almost $50,000 because the number of sponsors far exceeded what we needed.

Buying a building has been on my mind for a while (I just couldn't see how to manage it) so I've been watching the commercial real-estate market for well over a year now.  Based on the completed sales I've seen and my own experience with real estate (my mom used to be a broker), I think we can find a place that will work for around one million dollars.  For a commercial loan, that means a down payment of around $300,000 and a mortgage that we can cover with the money we currently pay in rent.

And that is why we need more sponsors, well beyond the minimum of 300.  We need to put aside enough for that down payment and we need to do it in four to five years.  I don't know if we can get there, I don't even really know if we can get close.  But I'm going to try and I'd like you to help.

Last year we did something unprecedented in bookselling.  I am hopeful that we can do something even more remarkable -- deliberately create a bookstore that is meant to last as long as there are books and people who want to buy them.

I'll be going into some more detail about this idea in later newsletters.  I think that outline will do for now.  There's only one thing left to say:

I and everyone else at Borderlands salute the 844 people who decided that bookstores matter and that Borderlands mattered enough to save.  And we further salute the 405 people and counting who've decided that, a year later, Borderlands still matters.  We are here today because of you.  You have our heartfelt gratitude.

Sincerely,
Alan Beatts

PS  If you would like to know more about how the sponsor program came about, please see our sponsor's blog - http://borderlands-sponsors.blogspot.com/p/why-sponsorships.html.  For details about what benefits sponsors receive - http://borderlands-sponsors.blogspot.com/p/sponsor-benefits-and-privilidges.html.  And, if you browse around that blog a bit, you'll see some of what we've done with our sponsors over the past year.

PPS  You can become a sponsor on-line at https://borderlands-books.com/buysponsorship16.html, or you can call 888 893-4008, email office@borderlands-books.com or come into the store in person.

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